Category: Law & Policy

Slants Trademark Decision May Have Other IP Implications

In 2010, the Oregon-based, Asian-American band had its application for a trademark in the name The Slants rejected by the US Patent and Trademark Office. The denial was based on a statute in the 1946 Lanham Act prohibiting registration of marks “which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.”  In other words, the USPTO rejected The Slants because the word slant can be used as a pejorative to disparage Asian people, which is precisely why the band adopted the name in the first place.  (Readers may have seen headlines stating that the Supreme Court ruled in favor of the trademark status of the much-debated offensiveness of the Washington Redskins name; but in fact, the Redskins matter is settled by virtue of the holding in this case Matal v. Tam.)

When artists or other speakers, who represent particular ethnic groups, reclaim disparaging terms, it usually serves as a very powerful way to diminish the harmful force of the words themselves.  For instance, as important as it is to respect the serious history of the ultimate pejorative for African Americans, the way in which a comedian like Richard Pryor weaponized the N-Word* (or for that matter how Mel Brooks satirized it in Blazing Saddles) cannot be overstated for the capacity of those expressions to alleviate social barriers by transposing genuine animosity into self-reflective satire.

The Slants are presumably following in this tradition, which does not mean that some people still won’t be offended by the name; but as Monday’s Supreme Court ruling affirms, an agency like the PTO may not consider the prospect of offense when registering a trademark without violating the First Amendment. As a result of this case, the disparagement clause (§1052(a)), which has been part of the Lanham Act since its passage 71 years ago, has now been declared unconstitutional.  Whether this has further implications for other clauses in the act remains to be seen.

The outcome in Tam has reasonably been viewed as a First Amendment victory, a reminder that the government has no business making judgments about private speech, and also a recognition that a trademark can absolutely be a form of expressive speech.  In past cases, the courts have held that the denial of a trademark is not a violation of speech because the lack of registration does not prevent a party from using a desired mark as expression.  A key difference in this case is that the government sought to argue that registering trademarks is analogous to government subsidies (e.g. grants from the NEA), and, therefore, the reistration of trademarks is a form of government speech.  All eight justices disagreed (Justice Gorsuch was not part of the ruling).

In circumstances like federal or state grants, the parties responsible for administering those subsidies may impose judgments regarding potential disparagement; and in fact, we would generally hope that they do so.  It is also not a violation of law for the government to spend public dollars to communicate a one-sided message, like an anti-drug or consumer safety campaign.  In fact the Court observes in this decision that demanding neutrality of government in speech would render it dysfunctional.  And although most of us wouldn’t want to see public dollars spent with the purpose of ridiculing or provoking bigotry against a particular race, culture, religion, nationality, etc., it cannot be denied that government officials and agencies have done all of these things at various times in our history.

Regardless, the PTO’s argument in Tam that the registration of a trademark is tantamount to government speech by way of subsidy was first rejected by the District Court and then upheld by the Supreme Court. From the decision …

“Contrary to the Government’s contention, trademarks are private, not government speech.… for if private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.”

Or as it was stated in a slightly more amusing fashion …

“It is thus farfetched to suggest that the content of a registered mark is government speech, especially given the fact that if trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently.”

There’s probably a website somewhere insisting that the government is speaking in the coded language of Cheetos®, Tide®, and Red Bull®; but tinfoil hats aside, the decision in this case may have broader implications for other IP, particularly copyright. Specifically, the Court seems to have indirectly weighed in on a somewhat novel proposal from the libertarian right that intellectual property is a government subsidy.  In fact, the District Court in this case, made a direct comparison to copyright law in stating, “…the government would be free, under this logic, to prohibit the copyright registration of any work deemed immoral, scandalous, or disparaging to others.”

In other words, arguing that the registration of trademarks is a form of government speech through subsidy would, by extension, empower the government to censor speech through the copyright registration process.  Nevertheless, it has been in vogue for a few years now to describe copyright as a government-granted subsidy to authors; and then, by logic of the straw man, to assail the regime as a “federal regulation” that is holding back “innovation.”  It is an idea that appears to convene allies among the anti-corporate left and the anti-regulatory right; and lately, when I see that kind of agreement between ideological opposites, I tend not to conclude “strange bedfellows” so much as to assume that both sides are just wildly misinformed and not considering the implications of their position.

Of course, this “government subsidy” idea goes back to that larger debate over IP as natural right vs. IP as a purely utilitarian legal framework.  For now, though, in upholding Simon Tam and his friends’ right to trademark their band name (offensive or not to some people), the Supreme Court has provided an important lesson in the nature of American free speech and placed the government in its proper role as neutral provider of public services available to all citizens on equal terms.

See also:  Terry Hart’s Copyhype post from 2016.

*On a side note, the rap band N.W.A trademarked its name.

EU Court of Justice Ruling – A New Chapter?

Photo by alexskopje Pond5

This week, the Court of Justice of the European Union concluded what any rational observer would conclude about websites that make large volumes of unlicensed copyrighted works available to the public — that their owners know exactly what they’re doing and why they’re doing it.  A Netherlands-based foundation that protects copyright interests argued in the nation’s Supreme Court that two ISPs could be ordered to block access to The Pirate Bay.  That court referred the case to the EU Court of Justice for interpretation under the EU Copyright Directive.

Among the long-standing defenses employed by pirate site owners attempting to thread their operations through statutory imperfection, is the claim that they do not upload infringing copies of works to their servers. Their users upload the files.  Even if you’re the most pro-piracy individual in the world, there is nothing about that kind of reasoning that should pass the smell test, and now the EU has wrinkled its nose and declared that making works available in the manner that The Pirate Bay does “may constitute an infringement of copyright.” A decision published two days ago states the following:

“Whilst it accepts that the works in question are placed online by the users, the Court highlights the fact that the operators of the platform play an essential role in making those works available. In that context, the Court notes that the operators of the platform index the torrent files so that the works to which those files refer can be easily located and downloaded by users. ‘The Pirate Bay’ also offers — in addition to a search engine — categories based on the type of the works, their genre or their popularity. Furthermore, the operators delete obsolete or faulty torrent files and actively filter some content.”

If it walks, talks, and looks like an infringing enterprise, it’s probably an infringing enterprise.  Further, the EU Court decision offers a statement that may have considerable ramifications for site owners who have consistently sought to appeal to safe harbor provisions, based on the assumption that they are ignorant about what users do on their platforms.

“… it is clear from the Hoge Raad’s [Supreme Court of the Netherlands] decision that the operators of ‘The Pirate Bay’ cannot be unaware that this platform provides access to works published without the consent of the rightholders. [sic]”

Not only does this have implications for sites like TPB that are dedicated to piracy, but also to service providers and search engines that provide access to those sites as well as legal platforms that earn “unintentional” revenue from infringement. Most prominently, of course, I’m referring to YouTube, which has unquestionably profited from hosting unlicensed material while remaining shielded by safe harbors. The EU Court’s rational conclusion that site owners cannot be nearly so deaf, dumb, and blind as they claim, may prove to be a major threshold moment for counter-piracy efforts around the world.

In fact, the day before that decision was published, a new global initiative was announced by 30 major content creators, including old names like MGM and new names like Hulu.  The Alliance for Creativity and Entertainment (ACE) calls itself a “new global coalition dedicated to protecting the dynamic legal market for creative content and reducing online piracy.”

Stressing the importance of legal frameworks to foster the growth and maintenance of new platforms for accessing a diverse range of filmed entertainment, the Alliance states in its press release that it will “conduct research, work closely with law enforcement to curtail illegal pirate enterprises, file civil litigation, forge cooperative relationships with existing national content protection organizations, and pursue voluntary agreements with responsible parties across the internet ecosystem.”

While piracy advocates continue to claim (and not without precedent) that they will always find a way to keep infringing, 2017 may prove to be the year when we start to see much better cooperation among major rights holders and the major online platforms. It has certainly been the year when many parties (e.g. advertisers) have finally rejected the traditional claim by the internet industry that the web operates best as a self-governing universe.  And it seems that many users are coming to realize that platforms are already governed plenty by their owners in the service of their own financial interests.

Not Just About Piracy

Google and other platforms have strongly resisted demoting, removing, or de-indexing links to content that is defamatory, illegal, or otherwise harmful—even when courts have ordered companies to do so. “Digital rights” organizations have consistently taken what can be described as a maximalist position in blindly defending liability shields in both the DMCA and the CDA—even to the extent that the EFF apparently saw no reason for exception in the face of evidence that Backpage.com may have been supporting the trafficking of minors in the sex trade.

As levels of violence and extremism continue to grow, both American and European leaders have already indicated a desire to make online platforms more responsible for policing their sites; and this pendulum can absolutely swing too far in the wrong direction. As technologist Jaron Lanier warned this week on NPR, we do not want to give private corporations like Google too much power to “police” the web because they are not subject to oversight as government agencies are.  This is a much larger topic for future posts, but at the same time, it is known that enterprise-scale piracy intersects with other forms of criminal activity—particularly the malware trade.

Historically, whenever trends like those we’re seeing this year begin to write a new narrative, government turns to the industry in question with an ultimatum—that they can clean up their own act or Congress will do it for them. Given the present chaos in Washington, including specifically at the Department of Justice, predicting where exactly U.S. policy on countering illegal online activity is heading is a murky prospect at best.  Nevertheless, this EU Court decision; the recent mood of major advertisers toward Google; this new ACE coalition; and a perceptible shift in sensibility among users who feel that platforms need to be more proactive to counter hate crime, harassment, and violence all suggest that the internet industry may be about to become better partners in addressing some of the negative effects their business models have created.

DCA Report: Users Demand Some Accountability For Platforms

On December 31, 2016, in a post called The Morning After or Social Media is a Humbug, I wondered whether or not 2017 would be the year when users, advertisers, and even the major web platforms would begin to demand more accountability online and move away from the general belief that a laissez-faire approach to all internet governance was universally beneficial.

After the election, many citizens woke up to the reality of fake news and consequently reaffirmed some faith in traditional journalism with an immediate spike in subscriptions. In March, we saw major brand advertisers threaten to boycott Google if the search and ad giant did not figure out how to keep brand ads away from toxic content like terrorist propaganda videos.  And this morning, Digital Citizens Alliance released a new report, Trouble in Our Digital Midst, indicating that a majority of Americans may be losing trust in the internet as a source of reliable information and as a secure environment.

Building on past studies, like the overall proliferation of malware on pirate sites and trojan horse viruses used to prey on minors, DCA’s 2017 poll comprising 1,240 respondents indicates that approximately 60% of Americans currently favor the web companies taking more responsibility for the manner in which their platforms are used.  Just a few years ago, it seemed that people largely accepted the premise that online platforms should remain neutral on the assumption that it was better to allow a few bad actors to slip through the net than to risk “stifling the speech” of innocent parties. But as the potential toxicity of fake news, malware scams, terrorist propaganda, and major online hacks have become more common and high-profile, that mood appears to be shifting.

In addition to sharing its findings, the DCA compliments major players like Google and Facebook for at least altering their standard response to the ills of bad actors …

“… digital platforms over the last year have shown a new willingness to intervene, impact, or even alter the content on their platforms on issues of national importance. Given that they have opened the door, they must take a fresh and holistic look at all illicit goods, services, content, and behavior on their platforms. The response, ‘we’re just a platform,’ clearly is not the answer in response to the Fake News problem and objectionable content that has brand name advertising imprinted upon it, and it shouldn’t be the answer when it comes to stolen credit cards, counterfeit goods, illicit drugs or pirated movies, TV shows and music, or the violation of our young.” 

This new report notes that 2017 was the first time the Federal Trade Commission issued a consumer warning about the increased likelihood that visiting pirate sites will expose users to malware attacks, leaving them vulnerable to ransom demands, identity theft, and computer slaving that preys on kids by exploiting their webcams and microphones. DCA also reminds readers of the 2015 research by RiskIQ, which found that on the dark web, where hackers pay pirate site owners to distribute malware, that business was over $70 million year at the time of the study.  “Take a moment to think about that – if hackers are paying content theft websites $70 million to drop malware on their sites that infect visitor computers, how much are they making?” asks the report.

DCA proposes what it calls a “neighborhood watch” approach to address these growing problems with a new mindset.  Primarily, this would involve the major platforms doing a better job of sharing information with one another regarding bad actors the same way retailers and other industry competitors do for the overall health of their markets. “While digital platforms collaborate on policy and technical issues, there is no evidence that they are sharing information about the bad actors themselves. That enables criminals and bad actors to move seamlessly from platform to platform,” the report states.

I’m not surprised to see Google and Facebook change their tune at least a little bit this year.  The threat of boycott by the advertisers who pay the bills was sure to get a response; as would the prospect of shedding users who may become disenchanted with Facebook if it were overwhelmed by fake news, trolls, and a psychos who share live video of murder.   The DCA acknowledges the fact that it is a major challenge to weed out hackers, counterfeiters, pirates, and violent extremists from using the internet as a base of operations without harming the free-flow of interaction for the rest of us.  Still, it is at least a step in the right direction if users are indeed beginning to understand that no community–perhaps least of all a virtual one–thrives without reasonable boundaries to protect safety and fair trade.